Biden administration sees Quad as fundamental foundation to build US policy on Indo-Pacific

The new Biden administration sees the Quad grouping comprising of the United States, India, Japan and Australia as a fundamental foundation upon which to build a substantial American policy in the strategically-vital Indo-Pacific region. National security advisor Jake Sullivan said at an event organized by the US Institute of Peace, a Congress-funded think-tank that the US will build on and carry forward the four-nation Quad grouping.

Quad and the Indo-Pacific policy of the Trump administration are one of the few policies that the Biden administration has said it will continue to build on, besides the Abraham Accords, Sullivan said.

“Those are in two different theaters in the world and two initiatives that you will see continuity and an effort to reinforce and carry forward steps that have been taken by the previous administration,” he said.

"When the first Accords with the UAE, Bahrain were announced, it was in the heat of a political campaign, a presidential campaign, and then candidate Biden made no bones about coming out saying: ‘I think this is a good thing. I think this is a positive thing',” he said.

Biden said consistently over the course of the last several months that he would like to carry forward this initiative, deepen the cooperation between the countries that have signed the accords, make real normalization that has taken root and add more countries, he said.

“He (Biden) sees that as being positive for security in the region, positive for economic development, in the region, and positive for America's national interest for many of the reasons that Robert laid out,” Sullivan said.

“So, one of the things that we will be doing in the coming weeks and months is thinking about how we make sure that the seeds that have now been planted actually grow into the full kind of cooperation across multiple dimensions and these relationships can move forward and how that can really help the United States advance our interests,” he said.

In November 2017, India, Japan, the United States and Australia gave shape to the long-pending proposal of setting up the "Quad" to develop a new strategy to counter China's aggressive behaviour in the strategically-vital Indo-Pacific region.

The evolving situation in the Indo-Pacific region in the wake of China's increasing military muscle flexing has become a major talking point among leading global powers. The US has been favouring making Quad a security architecture to check China's growing assertiveness.

China is engaged in hotly contested territorial disputes in the South and East China Seas. Beijing has also made substantial progress in militarizing its man-made islands in the past few years.

Beijing claims sovereignty over all of the South China Sea. But Vietnam, Malaysia, the Philippines, Brunei and Taiwan have counterclaims. In the East China Sea, China has territorial disputes with Japan.

The South China Sea and the East China Sea are stated to be rich in minerals, oil and other natural resources. These are also vital to global trade. Although, the US lays no claims to the disputed waters, it has challenged China's growing territorial claims in the South China Sea by deploying warships and fighter jets to assert freedom of navigation and over flight patrols in the strategically-vital region.

Iranian Foreign Minister meets Taliban delegation in Tehran

Iranian Foreign Minister Mohammad Javad Zarif met on Sunday with a Taliban delegation led by deputy head of the group’s political bureau Mullah Abdul Ghani Baradar. In the meeting, Zarif welcomed the idea of formation of an all-inclusive government with the participation of all ethnic and political groups in Afghanistan, the Iranian Foreign Ministry said in a statement.

“Political decisions could not be made in a vacuum, and the formation of an all-inclusive government must take place in a participatory process and by taking into account the fundamental structures, institutions and laws, such as the Constitution,” the statement quoted Zarif as saying in the meeting.

The chief Iranian diplomat expressed Iran’s readiness to facilitate dialogue among the Taliban, the Afghan government and other Afghan groups, noting, “The noble people of Afghanistan have been wronged. The war and occupation of Afghanistan have dealt heavy blows to the Afghan people.”

He expressed hope that the Taliban would focus efforts on an immediate end to the pains and problems of Afghan people so that the establishment of peace in Afghanistan would strip the outsiders of a pretext for occupation.

According to a Tasnim report, Zarif also voiced support for an all-inclusive Islamic government in Afghanistan.

“We support the formation of an all-inclusive Islamic government with the participation of all ethnicities and sects and consider it necessary for Afghanistan,” Zarif was quoted by Tasnim as telling the Taliban delegation. He underlined the need for the Taliban to avoid targeting the people of Afghanistan.

Zarif also told the Taliban delegation that the United States is not a good mediator.

The Taliban delegation, for its part, gave a report of the Afghan peace process and the intra-Afghan negotiations.

“Mullah Abdul Ghani Baradar also noted that the relations between Afghanistan and Iran are based upon friendship and good neighborliness, expressing hope for the expansion of relations between the two countries with the establishment of peace and calm in Afghanistan,” the statement noted.

India upset with efforts to improve relations between Islamabad and Dhaka

The recent move of Pakistan to lift visa restrictions for Bangladeshi citizens and Dhaka’s request that Islamabad issue an apology for mass killings during its 1971 war of independence have raised concerns in India. 

Indians believe that any improvement in relations between Pakistan and Bangladesh will have implications for the complex geopolitical dynamics in South Asia, where India sees Bangladesh as an ally but Pakistan as a foe.

New Delhi also seeks to counter China’s growing influence in the region, which it deems its traditional area of influence.

India is propagating that China is behind Pakistan’s initiative to improve ties with Bangladesh. India also alleges that China wants Pakistan to activate its assets in Bangladesh.

India insists that China wants to develop its own support base among countries in India’s neighbourhood and use them against New Delhi, as part of its ‘string of pearls’ strategy.

For Bangladeshis, the long-sought apology from Pakistan for the 1971 genocide is a sensitive issue, and one necessary for relations to move forward. The liberation move which lasted nine months had led to a war between India and Pakistan.

Bangladesh has been demanding an apology from Pakistan. For the first time the request was conveyed formally, when Pakistan’s High Commissioner in Dhaka, Imran Ahmed Siddiqui, visited Bangladesh’s State Minister for Foreign Affairs, Shahriar Alam, for talks on strengthening economic cooperation. To Indian observers, the meeting between Alam and Siddiqui suggested a warming of ties between Pakistan and Bangladesh.

At one stage the relations between Bangladesh and Pakistan were strained to the extent that both sides expelled each other’s diplomats, imposed visa bans on each other’s nationals. Bangladesh Prime Minister Sheikh Hasina did not approve appointment of Pakistani High Commissioner to Dhaka for 20 months.

She accepted the appointment and in July 2020 and spoke to her counterpart, Prime Minister Imran Khan. In the diplomatic circle Hasina’s move was termed a positive development.

Bangladesh celebrates its 50th year of independence on March 26 and also the birth centenary of the country’s founding father, Mujibur Rahman, who is Hasina’s father. Analysts say that if Hasina succeeds in getting Pakistan’s apology it will be a prized feather in her cap.

Indian experts say Pakistan’s ability to tender an apology depended on Khan receiving support from the army and an Islamic group, both of which were implicated in atrocities during Bangladesh’s struggle of independence.

Indian instance is based on the role China had played in early seventies encouraging Bangladesh’s first government under Mujibur Rahman to come to terms with Islamabad. They also say Beijing had persuaded Rahman to drop his pursuit of alleged Pakistani war criminals in exchange for a seat at the United Nations, which Beijing had blocked unless Rahman acceded to its demands.

Meanwhile, India has tried to solidify its ties with Bangladesh, including by sending its top Foreign Service bureaucrat, Harsh Shringla, to Dhaka in August last year to assure Hasina of Delhi’s continued support after relations had been strained over the issue of illegal immigrants from Bangladesh into India and the alleged persecution of Hindus in Bangladesh.

Saudi surprise production cut a wonderful gift to US oil producers

According to some analysts, oil prices have risen by 10% since the end of 2020 and 8% since the OPEC+ meeting two weeks ago, but the rally has nothing to do with the short-term oil demand outlook. It has been almost exclusively due to the decision of Saudi Arabia—the world’s top oil exporter and OPEC’s de facto leader—to cut an additional one million barrels per day (bpd) from its production in the first quarter.

Saudi Arabia, as well as major forecasters, expected oil demand in Q1 to continue to struggle as major economies in Europe and some parts of China are under renewed lockdowns to fight the spread of COVID-19.   

The Kingdom’s “wonderful surprise” to the oil industry, as its Energy Minister Prince Abdulaziz bin Salman described the extra cut in a Bloomberg interview, lent support to oil prices while the outlook for Q1 demand continues to deteriorate, due to the spreading virus, strict lockdowns, and a slow start to vaccination programs.    

The Saudi ‘generosity’ signals that the Kingdom is willing to forgo short-term market share in order to prop up prices amid weak immediate demand, tighten the market faster, and wait for the opportunity to ramp up production once oil demand rebounds at some point in the second half of 2021.

Yet, in the process, the Saudis would incentivize increased activity in the US shale patch, which could abandon the promised restraint in spending, and increase production. Higher than currently estimated US oil supply could cap oil price gains and ruin the Saudi attempts to tighten the market.

The Saudi cut also signals growing divergence in oil price fixing policies between the two leaders of the OPEC+ pact, Saudi Arabia and Russia. Saudi Arabia looks more eager to see higher oil prices, even at the expense of losing more market share to US shale. Russia, which had pushed for another 500,000-bpd collective production increase from OPEC+ in February, has been wary for years that by cutting its own production and helping to support prices, it is actually boosting US oil output.  

International Energy Agency (IEA) has yet again cut its outlook on global oil demand for 2021, including revising down its Q1 demand projection by 600,000 bpd. Therefore, it seems Saudi Arabia has made the right call when it announced the extra one million bpd cut to its production for February and March. In terms of achieving higher oil prices and a tighter market going into the second half of 2021, the Saudi move looks right.

According to the IEA’s monthly report from this week, the OPEC+ group’s “more proactive production restraint looks set to hasten a drawdown in the global stock surplus.”

“Assuming OPEC+ achieves 100% compliance with the latest agreement, global oil stocks could draw by 1.1 mb/d, or 100 mb, in 1Q21, with the potential for much steeper declines during the second half of the year as demand strengthens,” the agency said.

But while Saudi Arabia’s energy minister says, “We are the guardian of this industry,” the Kingdom is (maybe inadvertently) helping US shale by ‘guarding’ the price of oil from collapsing when demand is weak, as it is this quarter.

Analysts, including OPEC and the IEA, say that the higher oil prices—thanks to Saudi Arabia—could provide a reason to the US shale patch to boost drilling activity more than anticipated earlier.

The “wonderful” Saudi gift to support the oil market could hinge on US oil producers resisting the temptation to increase production after WTI Crude prices hit this month US$50 a barrel mark for the first time since February 2020.  

US firms “seem committed to pledges made to keep production flat and instead use any price gain to pay down debt or to boost investor returns. If they stick to those plans, OPEC+ may start to reclaim the market share it has steadily lost to the US and others since 2016,” the IEA said in its latest Oil Market Report.

Oil above $50 is set to create a chain reaction in the US shale patch, which could see cash from operations (CFO) rise by 32% this year. Shale producers in the Permian Midland, Permian Delaware, Eagle Ford, Bakken, and DJ basins could see their combined CFO increase to US$73.6 billion in 2021, up from an estimated US$55.7 billion in 2020, but still down from US$87 billion in 2019. Nevertheless, WTI Crude averaging above US$50 and the higher cash flow in the shale industry would allow producers to increase their activity spending.

The higher activity in the shale patch will be necessary just to keep US production flat, but above US$50 oil price could be tempting. Analysts expect a cautious ramp-up of activity, with shale oil production continuing to decline into the second half of 2021. Despite all the compelling arguments for restraint, the industry’s history suggests that increased cash flows generally get turned very quickly into new wells. 

 

Beijing decides not to recognize British National (Overseas) passport as travel document

In a surprise move, Beijing has declared it will stop recognizing British National (Overseas) passports as travel and identification documents from Sunday and warned of further actions in retaliation against Britain’s offer of a pathway to citizenship to 5.4 million eligible Hongkongers.

The announcement was made by Chinese foreign ministry spokesman Zhao Lijian at a daily press briefing. The move came hours after British authorities announced details of the application process for the new BN(O) visas. The rule will become effective on Sunday 5.00pm.

 “Britain has ignored the fact that Hong Kong has already been returned to China for 24 years,” Zhao said. He accused London of ignoring Beijing’s “stern stance” against the new BN(O) policy, adding it would turn Hongkongers into “second-class citizens”.

Zhao said the BN(O) scheme was no longer one that had been agreed upon by both sides.

“[The new visa] is a serious violation of China’s sovereignty and a violent intervention of Hong Kong’s affairs and China’s internal affairs. It is a serious violation of the international laws and the basic principles of international relations,” he said.

The new British National (Overseas) visa will allow successful family applicants to stagger their arrivals so one parent can remain in Hong Kong to continue earning an income while the other goes over with their dependants. Such details of the much-anticipated scheme emerged as the British Home Office announced on Friday morning that applications would open online at 5pm on Sunday.

Britain decided to introduce the new visa July 2020 response to Beijing’s imposition of a sweeping national security law on Hong Kong. Some 5.4 million people in its former colony are eligible for British citizenship after five years of living there using the special visa.

Israel wish list for a new Iran Nuclear Deal

Ensuring US President Joe Biden administration works to fully and effectively prevent Iran from developing a nuclear weapon is the first priority for Israel. If the Biden administration enters into talks with Iran, Israel wishes to ensure the weak points of the Joint Comprehensive Plan of Action, the 2015 nuclear agreement between Iran and world powers are left out of the new deal.

Those include removing the sunset clauses, which gradually removed sanctions and limitations on uranium enrichment, such that Iran would have been able to develop a nuclear weapon in 2030 under the terms of the JCPOA.

Another Israeli priority is “anywhere, anytime inspections” of Iran nuclear sites, as opposed to Tehran being forewarned as the deal currently requires.

Those are far more important to Israel than something members of the Biden administration and some Israeli media reports have suggested: to add clauses to the JCPOA to stop Iran’s ballistic missile program and malign activities in the region. Israel believes Iran must not have a right to enrich uranium under whatever future framework is reached.

Israel is preparing a plan to counter Biden administration’s intention to negotiate a return to the Iran deal. As reported in The Jerusalem Post earlier, the security cabinet has not met to discuss the matter, but the senior government source said a smaller forum of top ministers will likely determine overall strategy.

In recent weeks, Biden administration officials have said talk of rejoining the JCPOA is premature, and that they plan to speak with allies in the region, Israel among them, before negotiating with Iran. Israel is reassured by those remarks, and that Israel is not looking for a fight with Biden. Rather, Israeli officials prefer that there be conversations behind closed doors between top officials.

Prime Minister Benjamin Netanyahu is expected to seek an in-person meeting with Biden in the coming months. Such a meeting between the Israeli prime minister and the new US president is customary during the first few months of a new administration in Washington in recent decades, but has even greater urgency due to the administration’s Iran policies. However, Biden may not want to meet with Netanyahu before the March 23 election in order not to appear like he is taking sides.

Tehran-Muscat stress expansion of economic and banking ties

During a meeting between the Governor of the Central Bank of Iran (CBI) and Oman’s Foreign Affairs Minister Sayyid Badr bin Hamad, in Muscat, the two sides emphasized the necessity of expanding bilateral economic and banking relations.

Addressing the meeting, the Omani minister pointed to the importance of Iran's role and position in the region, and considered the expansion of trade and economic relations between the two countries important.

It should be noted that before this and in the meeting of the CBI governor with the commerce and industry minister of Oman in Tehran last year, strategies for continuous development and facilitation of banking and trade relations between Iran and Oman were discussed.

Hemmati arrived in Muscat on Tuesday for a two-day visit aimed at strengthening trade and banking relations between the two countries, given the new international condition.

Despite the US reimposition of sanctions against Iran, Oman is getting closer to the Islamic Republic both politically and economically. There is also the same approach adopted by Iran, as Iranian companies now prefer to conduct trade with Oman rather than the United Arab Emirates (UAE), given that the UAE is highly complying with the sanctions.

Iran is somehow replacing some of its previous strategic trade partners such as UAE with Oman, considering the Sultanate as an economic-trade hub.

Over the past two years, there have been many meetings and negotiations between trade and economic officials from the state-run and private sectors of the two sides with the aim of strengthening and expanding bilateral trade ties.

During the 18th meeting of the Iran-Oman Joint Economic Committee in Tehran, Omani minister of commerce and industry had said that his country was trying to boost its trade and economic ties with Iran, stressing that this goal could be achieved through more cooperation between the two sides’ private sectors.

Ali bin Masoud al Sunaidy also said, “We will make the most efforts to provide incentives for joint investment and also promote bilateral trade cooperation between the two countries.”

Stressing that a very proper condition is available for invigorating the bilateral trade, the Omani official said the two sides can also take the advantage of bartering to expand their trade ties.

Addressing the same meeting, Iran’s Former Industry, Mining and Trade Minister Reza Rahmani said while there are potential and capabilities for boosting the trade turnover between Iran and Oman to $5 billion, the figure is currently $1 billion.

The International North South Transit Corridor (INSTC) can help the two countries elevate their bilateral trade to this level, the minister noted.

Meanwhile, Iran-Oman Joint Chamber of Commerce and Iran Mine House (IMH) signed a memorandum of understanding on cooperation for the expansion of the Iranian private sector’s presence in Oman in early August, 2020.